Holiday shoppers, prepare to be bombarded with social media ads — and scams.
Highly targeted advertising on social media sites like Instagram and Facebook makes it easier than ever for brands to get in front of their target market. But these ads also make it easier for shady brands to dupe eager scrollers and shoppers with glossy images, only to deliver low-quality goods or nothing at all.
Scams originating on social media have skyrocketed in recent years.
According to data from the Federal Trade Commission, complaints of fraud that started on social media jumped from nearly 28,900 in 2019 to more than 71,500 in 2020. And that figure is on pace to double again in 2021, with nearly 76,000 reports of social media fraud filed in the first half of this year, resulting in $292 million lost by consumers.
“While these advertising platforms try to weed out obvious bad actors via their automated algorithms, it is literally impossible for them to fully protect end consumers from sketchy companies,” says Oleg Donets, co-founder and chief marketing officer for Real Estate Bees, a marketing platform for the real estate industry. “Most of the time, the responsibility of vetting advertisers falls on the shoulders of end customers.”
But how do you know which brands to trust? These five steps will help you separate the gems from the fakes.
1. Search for independent reviews, complaints
Reviews on a company’s website can be cherry-picked, or worse, completely fabricated. So look for customer feedback on independent sites, like Trustpilot and Google My Business, and search for complaints on the Better Business Bureau’s scam tracker.
You can also tap friends, family and your broader social network for insight. They’ve likely been served the same ads as you, and odds are good that someone pulled the trigger and can tell you if the product is as advertised.
“I have friends who have had success ordering clothing via [Instagram] ads, so I go to them for recommendations on which brands they trust,” says Andrea Woroch, a consumer savings expert based in Bakersfield, California.
Not finding any reviews? Consider that a red flag.
2. Research the domain history
One clue to a business’s legitimacy is how long its website has been around. To find out when a website was created, simply plug the URL into the Internet Corporation for Assigned Names and Numbers’ lookup tool.
Sketchy companies pop up and disappear faster than the moles in the arcade game, creating a new domain name every time they resurface, so be wary of any sites created in the past year. Companies with an established web presence are more likely to be legitimate, but you’ll still want to check reviews and return policies.
3. Test out customer support
Take the brand’s customer service on a test drive before buying. Reach out to the company through its official channels, such as a support email or phone number, as well as by direct message on the social media platform.
Donets suggests doing this multiple times to get a true sense of the company’s responsiveness.
“In my experience, this strategy works 90% of the time,” Donets says. “In most cases, a shady company will answer one or maximum two questions, and then they would stop replying.”
4. Triple-check the return policy
Make sure you’re crystal clear on the return policy before tapping the “buy” button. If you’re unhappy with the item, how many days do you have to return it? Does the site allow for a full refund or will you be issued a credit? Does the company even allow returns?
“I fell into this trap and bought a ring with my daughters’ names on it,” Woroch says. “It did not look like the picture in the ad, and unfortunately I overlooked the no-return policy. So basically I threw away $40.”
5. Pay with a credit card
You can do all the research in the world and still fall victim to a glossy Instagram ad. And if you paid from a checking account or with cryptocurrency, you have little recourse to get your money back.
But credit cards have an extra layer of protection. If an item isn’t as advertised and the brand’s customer service doesn’t come through and resolve the issue, you can initiate a chargeback through your credit card company and have the charge reversed.